Tesla shares are down 70% for the year

New York
CNN
 — 

Tesla’s stock is finishing out its tumultuous year with yet more turbulence: It’s up almost 6% Thursday, but still down more than 10% since last week. And a new cut to its price target from Morgan Stanley isn’t helping.

Year-to-date, the stock is down about 70%. Morgan Stanley analysts on Thursday said that the company’s sliding stock price represents a buying opportunity, but they cut its price target from $330 per share to $250. Tesla shares are trading at $122, with the stock up about 8% Thursday.

Morgan Stanley still believes the company is somewhat undervalued as a result of the big recent sell-offs, citing its head start over the electric car competition, and potential tax advantages as a result of the Inflation Reduction Act passed earlier this year.

The losses, however, have further put a dent in the fortunes of one of the world’s richest people. According to the Bloomberg Billionaires Index, CEO Elon Musk is now worth $132 billion — less than half what he was worth at the beginning of the year. He lost the world’s richest person title two weeks ago to Bernard Arnault, the chairman of French luxury goods giant LVMH

(LVMHF).

A popular misconception has emerged about Elon Musk and Tesla: The megabillionaire’s love affair with Twitter is the main reason Tesla shares have lost so much value this year.

Even as Musk signals he may give up his CEO title at Twitter, investors became concerned that the outlook for Tesla’s sales and profit is taking a turn for the worse. A sign of the weakening demand: Tesla has announced a rare sale. The company offered two rebates for buyers who take delivery of a vehicle before the end of the year, initially offering a $3,750 discount earlier this month. Tesla then doubled that rebate to $7,500 last Thursday.

“Tesla clearly is starting to see demand cracks in China and in the US at a time that EV competition is increasing across the board,” said Dan Ives, tech analyst with Wedbush Securities and a Tesla bull who cut his price target for the stock last Friday from $250 to $175. “The price cuts that Tesla enacted was the straw that broke the camel’s back on the stock.”

Another reason Tesla’s stock is sinking: The US economy could tip into recession next year, hurting car sales. Musk said on a Twitter Spaces call two weeks ago that he foresees the economy will be in a “serious recession” in 2023.

“I think there is going to be some macro drama that’s higher than people currently think,” he said, according to Reuters, adding that homes and cars will get “disproportionately impacted” by economic conditions.

Part of the problem with Tesla’s stock price is that critics question whether it was ever worth the trillion-dollar valuation…